Is this even possible?

I have a 3% fixed rate mortgage. Quick math suggests that my current mortgage is worth 60-65. I could offer them 70-75 cents. My bank classifies all MBS as AFS so they even get the earnings bump (at least as of 12/31) from me buying above current market value..

You may have to go through a broker-dealer

My personal mortgage is at 2.75% and is a portfolio loan not securitized.

Casey TableTennis said:

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My personal mortgage is at 2.75% and is a portfolio loan not securitized.

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For my future knowledge, howd you get a portfolio loan that cheap?

CS78 said:

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Casey TableTennis said:

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My personal mortgage is at 2.75% and is a portfolio loan not securitized.

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For my future knowledge, howd you get a portfolio loan that cheap?

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Prosperity Bank was offering them two years ago.

Mortgages worth sub $1? This is new territory for this board.

Let the bidding begin. I will give you $0.85.

JamesBREI06 said:

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CS78 said:

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Casey TableTennis said:

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My personal mortgage is at 2.75% and is a portfolio loan not securitized.

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For my future knowledge, howd you get a portfolio loan that cheap?

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Prosperity Bank was offering them two years ago.

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I'm new around here (B&I board), please explain portfolio loan to me. I understand the securitization loans and figured all mortgages were done that way unless it was a non-bank transaction.

For instance, I had a boss who pooled money with a small group of guys and they would offer mortgages to people who couldn't get them other places. Typically doctors, dentists, and other young professionals right out of school. Good earning potential, low risk based on professional history, but zero credit. The banks wouldn't (at least at that time) give them mortgages. I ran into this problem when I graduated vet school in '14. Great earnings, but little credit or savings. The bank laughed.

Is that similar to a portfolio loan?

Water under the bridge, but the bank that holds my mortgage has a specific "Doctor Loan" for someone exactly like you. It's wild that most lenders can't get past the little/no credit history or savings thing for something they're going to keep on the books anyway.

reineraggie09 said:

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JamesBREI06 said:

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CS78 said:

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Casey TableTennis said:

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My personal mortgage is at 2.75% and is a portfolio loan not securitized.

---

For my future knowledge, howd you get a portfolio loan that cheap?

---

Prosperity Bank was offering them two years ago.

---

I'm new around here (B&I board), please explain portfolio loan to me. I understand the securitization loans and figured all mortgages were done that way unless it was a non-bank transaction.

For instance, I had a boss who pooled money with a small group of guys and they would offer mortgages to people who couldn't get them other places. Typically doctors, dentists, and other young professionals right out of school. Good earning potential, low risk based on professional history, but zero credit. The banks wouldn't (at least at that time) give them mortgages. I ran into this problem when I graduated vet school in '14. Great earnings, but little credit or savings. The bank laughed.

Is that similar to a portfolio loan?

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When a bank makes a portfolio loan, it just means they keep it instead of sell for securitization.

Do a lot of banks offer this? I love the idea of buying out my mortgage at a discount if interest rates go up. Im at 3.6% right now. I can't buy out in cash right now but I bet I can before interest rates come back to that level.

reineraggie09 said:

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Do a lot of banks offer this? I love the idea of buying out my mortgage at a discount if interest rates go up. Im at 3.6% right now. I can't buy out in cash right now but I bet I can before interest rates come back to that level.

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I think the don't sell them. They'll just ride out to maturity. They may have locked a swap to minimize exposure. Not really sure the mechanics. I'm not in traditional banking.

I can't imagine they would sell because they'd then have to recognize the loss and mark to market, which is exactly what got SVB into trouble.

CS78 said:

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Casey TableTennis said:

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My personal mortgage is at 2.75% and is a portfolio loan not securitized.

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For my future knowledge, howd you get a portfolio loan that cheap?

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They aren't really different pricing just different appetites for loans or not. Just need a lender willing to offer. These are mostly non-conforming loans so selling to the big MBS agencies isn't an option.

My experience is they are more common through brokerage firms for high income/high net worth folks. Don't even have to be a client. They aren't always attractive, but when there is capacity will drop rates in line with market to deploy capital.

My 2.75 mortgage is a 30 yr from June '21. Jumbo, cash out. Didn't need $125k, but wanted out of a 10 yr IO that was set to float in April 2026 (3.125). Conforming rates were not attractive, Jumbo was, so went cash out and ended up using in a commercial RE deal.

With how things have moved since, feel like I made a great call on timing by acting well before I needed to, in a way I didn't need to (cash out) time will tell.

I've read portfolio loans are also common in sub-prime market, but have no insights there.